If you’re time poor (and let’s face it, who isn’t these days) you may not be able to dedicate the time needed to do a decent job of sourcing your investment properties. This is where a buyers’ agent can be worth their weight in gold. So in this post I wanted to start you off with 5 reasons you might consider engaging a buyers’ agent.
But before we get into that, it’s worth explaining that a buyers’ agent is like a real estate agent who works for you, rather than the seller. You engage them to find a suitable property and negotiate the purchase on your behalf. Their fee structure usually works out to be around 1.5% to 3% of the purchase price, much like it is if you engage a real estate agent to sell your property. Most buyers’ agents will ask for a part payment of their fee up front, with the balance payable after settlement. Some will also agree a fixed fee rather than a percentage of the purchase price, which can give buyers some comfort, given you actually want the buyers’ agent to negotiate a lower purchase price, which in a percentage fee scenario would mean less money for the buyers’ agent.
Ok now that’s out of the way, it’s onto the 5 reasons you should consider engaging a buyers’ agent.
They have access to wider range of deals
Buyers’ agents have access to a range of property information databases that help them search more effectively than most buyers could, armed with their Saturday newspaper and realestate.com.au. Having said that, anyone can access useful databases like RP Data, but you do need to know what’s important and what to ignore, otherwise you run the risk of catching ‘analysis paralysis’. Where a buyer agent really comes into their own, however, is through their relationships with real estate agents, developers and builders. Through these contacts, buyers’ agents can access ‘off the market’ properties – that is, the sorts of deals that are snapped quickly and don’t need to be offered to the open market.
They know the purchasing process and how to negotiate
It’s always uncomfortable going into a negotiation when you don’t really know how much you should pay, and no one really goes out of their way to explain the process and what you should do at each step. This is where a buyers’ agent stands out. They will have researched the local property market and know what similar properties in the area have gone for in the past, so they’ll know how much they can offer without paying too much. They also know how to get the best deal at auction, or when tenders are called, or whatever the method of sale is, and they know the little signals and tricks and slips that selling agents give away, putting you in a more powerful negotiating position. A good buyers’ agent has a feel for how hard they can push to get the best deal without getting shut out.
They work for you
A buyers’ agent is retained by you and therefore 100% on your side. A good real estate agent is charming and helpful to buyers and may even offer to ‘work on the seller’, you mustn’t forget that they are being paid by the seller and will be looking after their interests, not yours. A buyers’ agent will help you draft requirements and criteria for your ideal property, tap their network and databases to compile a shortlist, recommend the best property to buy, negotiate and purchase on your behalf, and if you have a good one, they’ll stay in touch and keep you appraised of future opportunities for your consideration – which is handy if you’re building a portfolio and want access to good deals over time.
They can help you understand the right property to look for
Many property investors know what investment outcome they want but aren’t as clear on the property sourcing strategy that will get them there. The good thing about a buyers’ agent is they’ve probably worked with a number of clients in a similar situation, so can offer some advice on the types of properties to look for at what price point to achieve your goal. With a buyers’ agent you get expert assistance with navigating the various property types, suburbs and economic conditions, and your property procurement strategy will make the best of these factors.
Save time and energy
For anyone who’s been through the property purchasing process before, you’ll know it’s a bit of an administrative nightmare. A buyers’ agent will guide you on which forms need to be completed with what information, and submitted to who by when. And they know the workarounds and tricks that can smooth or shorten that process. Your buyers’ agent will also handle communications and negotiations with multiple listing agents on your behalf, which if you’ve done it before, you’ll know it’s a time consuming and sometimes energy sapping process. And they’ll do the legwork around inspecting properties for your shortlist – thus giving you back your Saturdays.
– Owen Davis
About Owen Davis: Owen Davis is the Principal of DFG Property, a full service property management & sales firm based in Sydney. Owen has over 15 years experience in property financing, real estate and property management. More than a third of his clients are among the top 10% of property investors in Australia.